SVB failed because most of their assets were in long term bonds. Because of the inverse relationship between interest rates and the value of a bond, the bonds lost value and the bank could no longer cover deposits.
Rising interest rates leads me to the next question. Doesn't Fiserv have a large amount of debt they have to refinance this year? Won't those higher interest rates put them in some kind of jeopardy?
@dld+1lBue2NC at least a few. This NY Bank that regulators also took over. I saw a list of the top 10 "at risk" banks. One of them was Precisions biggest client.
Continual game of debt refinancing
You don't need to worry about that.
Fiserv has many levers it can pull to prevent a reduction to the CEO's bonus. It could cut 401K matching, remove ESPP matches, or lay off employees. Do not worry, Frank's bonus will not be reduced due to rising interest rates.
How many other banks are like Silicon Valley Bankk? How many are on Fiserv cores?
When given the chance to kick the can down the road the powers that be will always choose to do so. Refinance and worry about how to cover in the future.